MySpace sale or spin-off process begins, says report

MySpace talks are reportedly set to take place between News Corp and around 20 potential suitors next month, as the struggling entertainment portal's parent company looks to sell or spin-off the business it acquired in 2005 for $580m.

According to Reuters, which cites a person familiar with the discussions, News Corp expects to hear from more parties over the next few weeks.

The Rupert Murdoch-run media empire will begin talks alongside Investment bank Allen & Co in the second week of March.

It's understood that most of the interest in the once-popular, but now seriously waning social networking site will come from private equity and venture capital outfits.

Reuters added that the likes of mobile social network MocoSpace and gaming site Zynga could also throw their hats in the ring. However, Zynga hasn't approached News Corp yet, according to Reuters' source.

Little-known MocoSpace, meanwhile, spun out an opportunistic press release earlier this month saying it was interested in buying MySpace, even though News Corp confirmed at the time that no such approach had been made yet.

In the meantime, MySpace continues to bleed out users – as they quit the now unloved site in favour of other social network portals.

Earlier this month, MySpace said in its Q2 earnings that it was officially seeking a buyer to offload the failing site, admitting for the first time publicly that it was in the market for a new owner.

At the start of the year it axed 50 per cent of its workforce, leaving just 500 staff at MySpace.

Elsewhere in the company, music boss Courtney Holt quit his role at the ailing portal in favour of being a key advisor to MySpace and News Corp. Paid Content has the deets here. Perhaps it's a move that signals Murdoch's desire to keep Holt on his books, even after the buyout or spin-off of MySpace.

Who knows, it could even mean News Corp is mulling a new entertainment portal. However, if true, it might want to reflect on the mistakes of the not-too-distant past first. ®